RELATING TO LENDING; AMENDING THE NEW MEXICO BANK INSTALLMENT
LOAN ACT OF 1959 AND THE NEW MEXICO SMALL LOAN ACT OF 1955;
ADDING AND AMENDING CERTAIN DEFINITIONS; IMPOSING A CAP ON
INTEREST RATES AND FEES FOR CERTAIN LOANS; AMENDING PAYDAY LOAN
DISCLOSURE REQUIREMENTS; REPEALING A SECTION OF THE NEW MEXICO
SMALL LOAN ACT OF 1955.

"58-7-3. LOANS COVERED BY ACT.--The New Mexico Bank
Installment Loan Act of 1959 applies to a loan that is a
precomputed loan repayable in installments [or that is clearly
identified on the loan documents as being made under that
act]."

A. None of the provisions of the New Mexico Small
Loan Act of 1955 are amended or repealed by the New Mexico Bank
Installment Loan Act of 1959.

B. With the exception of precomputed loan
transactions, a lender is not bound by the provisions of the
New Mexico Bank Installment Loan Act of 1959 in making loans
where the loan is made in accordance with the provisions of
Sections 56-8-9 through 56-8-14 NMSA 1978.

C. None of the provisions of the New Mexico Bank
Installment Loan Act of 1959 apply to the assignment or
purchase of retail installment contracts originated under the
provisions of Sections 58-19-1 through 58-19-14 NMSA 1978 or
originated under the provisions of Sections 56-1-1 through
56-1-15 NMSA 1978.

D. In the event of a conflict between a requirement
of the New Mexico Bank Installment Loan Act of 1959 and a
requirement of the Home Loan Protection Act, the requirement of
the Home Loan Protection Act shall control.

E. As used in the New Mexico Bank Installment Loan
Act of 1959:

(1) "year" means three hundred sixty-five
days; and

(2) "month" means one-twelfth of a year.

F. The director of the financial institutions
division of the regulation and licensing department shall issue
and file as required by law interpretive regulations to
effectuate the purposes of the New Mexico Bank Installment Loan
Act of 1959. In issuing, amending or repealing interpretive
regulations, the director shall issue the regulation amendment
or repeal of the regulation as a proposed regulation amendment
or repeal of a regulation and file it for public inspection in
the office of the director of the financial institutions
division. Distribution thereof shall be made to interested
persons, and their comments shall be invited. After the
proposed regulation has been on file for not less than two
months, the director may issue it as a final regulation by
filing as required by law. Any person who is or may be
adversely affected by the adoption, amendment or repeal of a
regulation under this section may file an appeal of that action
in the district court in Santa Fe county within thirty days
after the filing of the adopted regulation, amendment or repeal
as required by law.

G. Any person, corporation or association complying
with the regulations adopted by the director of the financial
institutions division of the regulation and licensing
department is deemed to have complied with the provisions of
the New Mexico Bank Installment Loan Act of 1959.

H. [All loans other than precomputed] A loan
[transactions] transaction made [under] pursuant to the New
Mexico Bank Installment Loan Act of 1959 shall be clearly
identified on the loan documents as being made [under] pursuant
to that act."

"58-15-2. DEFINITIONS.--The following words and terms
when used in the New Mexico Small Loan Act of 1955 have the
following meanings unless the context clearly requires a
different meaning. The meaning ascribed to the singular form
applies also to the plural:

A. "consumer" means a person who enters into a loan
agreement and receives the loan proceeds in New Mexico;B. "debit authorization" means an authorization
signed by a consumer to electronically transfer or withdraw
funds from the consumer's account for the specific purpose of
repaying a loan;

C. "department" or "division" means the financial
institutions division of the regulation and licensing
department;

D. "director" means the director of the division;

E. "installment loan" means a loan that is to be
repaid in a minimum of four successive substantially equal
payment amounts to pay off [a] that loan in its entirety with a
period of no less than one hundred twenty days to maturity,

except as otherwise provided in Subsection C of Section
58-15-20.1 NMSA 1978. "Installment loan" does not mean a loan
in which a licensee requires, as a condition of making the
loan, the use of postdated checks or debit authorizations for
repayment of that loan;

F. "license" means a permit issued under the
authority of the New Mexico Small Loan Act of 1955 to make
loans and collect charges therefor strictly in accordance with
the provisions of that act at a single place of business. It
shall constitute and shall be construed as a grant of a
revocable privilege only to be held and enjoyed subject to all
the conditions, restrictions and limitations contained in the
New Mexico Small Loan Act of 1955 and lawful regulations
promulgated by the director and not otherwise;

G. "licensee" means a person to whom one or more
licenses have been issued pursuant to the New Mexico Small Loan
Act of 1955 upon the person's written application electing to
become a licensee and consenting to exercise the privilege of a
licensee solely in conformity with the New Mexico Small Loan
Act of 1955 and the lawful regulations promulgated by the
director under that act and whose name appears on the face of
the license;

H. "payday loan" means a loan in which the licensee
accepts a personal check or debit authorization tendered by the
consumer and agrees [in writing] to defer presentment of that
check or use of the debit authorization until the consumer's
next payday or another date agreed to by the licensee and the
consumer and:

(1) includes any advance of money or
arrangement or extension of credit whereby the licensee, for a
fee, finance charge or other consideration:

(a) accepts a dated personal check or
debit authorization from a consumer for the specific purpose of
repaying a payday loan;

(b) agrees to hold a dated personal
check or debit authorization from a consumer for a period of
time prior to negotiating or depositing the personal check or
debit authorization; or

(c) pays to the consumer, credits to the
consumer's account or pays another person on behalf of the
consumer the amount of an instrument actually paid or to be
paid pursuant to the New Mexico Small Loan Act of 1955; but

(2) does not include:

(a) an overdraft product or service
offered by a banking corporation, savings and loan association
or credit union; and

J. "person" includes an individual, copartner,
association, trust, corporation and any other legal entity;

K. "renewed payday loan" means a loan in which a
consumer pays in cash the administrative fee payable under a
payday loan agreement and refinances all or part of the unpaid
principal balance of an existing payday loan with a new payday
loan from the same licensee. A "renewed payday loan" includes
a transaction in which a consumer pays off all or part of an
existing payday loan with the proceeds of a payday loan from
the same licensee; and

L. "simple interest" means a method of calculating
interest in which the amount of interest is calculated based on
the annual interest rate disclosed in the loan agreement and is
computed only on the outstanding principal balance of the
loan."

A. A person shall not engage in the business of
lending in amounts of [two thousand five hundred dollars
($2,500)] ten thousand dollars ($10,000) or less for a loan
without first having obtained a license from the director.
Nothing contained in this subsection shall restrict or prohibit
a licensee under the New Mexico Small Loan Act of 1955 from
making loans in any amount under the New Mexico Bank
Installment Loan Act of 1959 in accordance with the provisions
of Section 58-7-2 NMSA 1978; provided, however, that loans in
an amount of ten thousand dollars ($10,000) or less shall be
made only pursuant to the New Mexico Small Loan Act of 1955.

B. Nothing in the New Mexico Small Loan Act of 1955
shall apply to a person making individual advances of [two
thousand five hundred dollars ($2,500) or less under] ten
thousand dollars ($10,000) or less pursuant to a written
agreement providing for a total loan or line of credit in
excess of [two thousand five hundred dollars ($2,500)] ten
thousand dollars ($10,000).

C. A banking corporation, savings and loan
association or credit union operating under the laws of the
United States or of a state shall be exempt from the licensing
requirements of the New Mexico Small Loan Act of 1955, nor
shall that act apply to business transacted by any person under
the authority of and as permitted by any such law nor to any
bona fide pawnbroking business transacted under a pawnbroker's
license nor to bona fide commercial loans made to dealers upon
personal property held for resale. Nothing contained in the
New Mexico Small Loan Act of 1955 shall be construed as
abridging the rights of any of those exempted from the
operations of that act from contracting for or receiving
interest or charges not in violation of an existing applicable
statute of this state.

D. The provisions of Subsection A of this section
apply to:

(1) a person who owns an interest, legal or
equitable, in the business or profits of a licensee and whose
name does not specifically appear on the face of the license,
except a stockholder in a corporate licensee; and

(2) a person who seeks to evade its
application by any device, subterfuge or pretense whatsoever,
including but not thereby limiting the generality of the
foregoing:

(a) the loan, forbearance, use or sale
of credit (as guarantor, surety, endorser, comaker or
otherwise), money, goods or things in action;

(b) the use of collateral or related
sales or purchases of goods or services or agreements to sell
or purchase, whether real or pretended;

(c) receiving or charging compensation
for goods or services, whether or not sold, delivered or
provided; and

(d) the real or pretended negotiation,
arrangement or procurement of a loan through any use or
activity of a third person, whether real or fictitious.

E. A person, copartnership, trust or a trustee or
beneficiary thereof or an association or corporation or a
member, officer, director, agent or employee thereof who
violates or participates in the violation of a provision of
Subsection A of this section is guilty of a petty misdemeanor
and upon conviction shall be sentenced pursuant to the
provisions of Subsection B of Section 31-19-1 NMSA 1978. A
contract or loan in the making or collection of which an act is
done that violates Subsection A or D of this section is void
and the lender has no right to collect, receive or retain any
principal, interest or charges whatsoever.

F. A person making a loan pursuant to the New
Mexico Small Loan Act of 1955 shall not use a device or
agreement that would have the effect of charging or collecting
more fees, charges or interest than that allowed by law by
entering into a different type of transaction with the borrower
that would have that effect."

A. At least once each year, the director or the
director's authorized representative shall make an examination
of the place of business of each licensee and the loans,
transactions, books, papers and records of the licensee insofar
as they pertain to the business licensed under the New Mexico
Small Loan Act of 1955 as the director may deem necessary. The
licensee shall pay to the director for such annual examination
a fee of two hundred dollars ($200).

B. Within a reasonable time after the completion of
an examination of a licensed office, the director shall mail to
the licensee a copy of the report of the examination, together
with any comments, exceptions, objections or criticisms of the
director concerning the conduct of the licensee and the
operation of the licensed office.

C. For the purpose of discovering violations of the
New Mexico Small Loan Act of 1955 or of securing information
lawfully required under that act, the director or the
director's authorized representative may at any time
investigate the business and examine the books, accounts,
papers and records used therein, including income tax returns
or other reports filed in the office of the director of the
revenue processing division of the taxation and revenue
department of:

(1) any licensee;

(2) any other person engaged in the business
described in Subsection A of Section 58-15-3 NMSA 1978 or
participating in such business as principal, agent, broker or
otherwise; and

(3) any person whom the director has
reasonable cause to believe is violating any provision of the
New Mexico Small Loan Act of 1955, whether the person claims to
be within the authority or beyond the scope of that act.

D. For the purposes of this section, a person who
advertises, solicits or makes any representation as being
willing to make loan transactions in any amount, except
persons, financial institutions or lending agencies operating
under charters or licenses issued by a state or federal agency
or under any special statute, shall be subject to investigation
under the New Mexico Small Loan Act of 1955 and shall be
presumed to be engaged in the business described in Subsection
A of Section 58-15-3 NMSA 1978 as to any loans of [two thousand
five hundred dollars ($2,500)] ten thousand dollars ($10,000)
or less.

E. To facilitate the examinations and
investigations by the director and fully disclose the
operations and methods of operation of each licensed office,
the licensee shall, in each licensed office, keep on file as
part of the records of the office all office manuals,
communications or directives containing statements of loan
policy to office managers and employees. If the licensee is an
individual, corporation, trust or association, the licensee
shall keep in at least one office for information of the
director a record of the several individuals, firms,
beneficiaries of any trust and corporations deriving or
receiving any part of the benefits, net income or profits from
the operation of the licensee within New Mexico.

F. For the purposes of this section, the director
or the director's authorized representative shall have and be
given free access to the offices and places of business, files,
safes and vaults of all licensees and shall have authority to
require the attendance of any person and to examine the person
under oath relative to such loans or business or to the subject
matter of any examination, investigation or hearing as provided
in the New Mexico Small Loan Act of 1955. Notices to appear
before the director for examination under oath may be served by
registered mail. If the party notified to appear is the
licensee, any person named on the face of the license being
investigated or any agent, employee or manager participating in
the licensee's business and the party fails to appear for
examination or refuses to answer questions submitted, the
director may, forthwith and without further notice to the
licensee, suspend the license involved pending compliance with
the notice. Upon failure of any other person to appear or to
answer questions, the director may apply to and invoke the aid
of any district court of New Mexico in compelling the
attendance and testimony of any such person and the production
of books, records, written instruments and documents relating
to the business of the licensee. The district court whose aid
is so invoked by the director may, in case of contumacy or
refusal to obey any order of the district court issued to
compel the attendance of the person or the production of books,
records, written instruments and documents, punish the person
as for contempt of court.

G. The director shall prescribe rules of procedure
for all hearings, examinations or investigations provided for
in the New Mexico Small Loan Act of 1955. The director is not
bound by the usual common law or statutory rules of evidence or
by any technical or formal rules of procedure or pleading and
specification of charges other than as specifically provided in
the New Mexico Small Loan Act of 1955 but may conduct hearings,
examinations and investigations in the manner best calculated
to ascertain the substantial rights of the parties interested.

H. The director has the power to administer oaths,
certify official acts and records of the director's office,
issue subpoenas for witnesses in the name of and under the seal
of the director's office and compel the production of papers,
books, accounts and documents. The director shall issue
subpoenas at the instance of any party to a hearing before the
division upon payment of a fee of two dollars fifty cents
($2.50) for each subpoena so issued.

I. Depositions may be taken with or without a
commission, and written interrogatories may be submitted in the
same manner and on the same grounds provided by law for the
taking of depositions or submission of written interrogatories
in civil actions pending in the district courts of this state.

J. Each witness who appears before the director by
the director's order shall receive the fees and mileage
provided for witnesses in civil actions in the district court.
Fees and mileage shall be paid by the state, but no witness
subpoenaed at the instance of parties other than the director
is entitled to compensation from the state for attendance or
mileage unless the director certifies that the witness'
testimony is material.

K. Whenever the director has reasonable cause to
believe that a person is violating a provision of the New
Mexico Small Loan Act of 1955, the director may, in addition to
all actions provided for in that act and without prejudice
thereto, enter an order requiring the person to desist or to
refrain from the violation. An action may be brought on the
relation of the attorney general and the director to enjoin the
person from engaging in or continuing the violation or from
doing any act in furtherance of the violation. In any such
action, an order or judgment may be entered awarding a
preliminary or final injunction as may be deemed proper. In
addition to all other means provided by law for the enforcement
of a temporary restraining order, temporary injunction or final
injunction, the court in which such action is brought shall
have power and jurisdiction to impound and to appoint a
receiver for the property and business of the defendants,
including books, papers, documents and records pertaining
thereto or so much thereof as the court may deem reasonably
necessary to prevent further violations of the New Mexico Small
Loan Act of 1955 through or by means of the use of the property
and business. The receiver, when appointed and qualified,
shall have powers and duties as to custody, collection,
administration, winding up and liquidation of the property and
business as are from time to time conferred upon the receiver
by the court."

"58-15-12. ADVERTISING.--A licensee or other person
subject to the New Mexico Small Loan Act of 1955 shall not
advertise, display, distribute or broadcast or cause or permit
to be advertised, displayed, distributed or broadcast in any
manner whatsoever a false, misleading or deceptive statement or
representation with regard to the charges, terms or conditions
for loans in the amount or of the value of [two thousand five
hundred dollars ($2,500)] ten thousand dollars ($10,000) or
less. The director may require that charges or rates of
charge, if stated by a licensee, be stated fully and clearly in
such manner as the director deems necessary to prevent
misunderstanding by prospective borrowers. The director may
permit or require licensees to refer in their advertising to
the fact that their business is under state supervision,
subject to conditions imposed by the director to prevent
erroneous impressions as to the scope or degree of protection
provided by the New Mexico Small Loan Act of 1955."

Section 8. A new section of the New Mexico Small Loan Act
of 1955, Section 58-15-20.1 NMSA 1978, is enacted to read:

A. The stated contract rate of interest for any
loan with a principal amount of ten thousand dollars ($10,000)
or less entered into pursuant to the New Mexico Small Loan Act
of 1955 shall be:

(1) for a loan with a principal amount of two
thousand five hundred dollars ($2,500) or less, no greater than
ninety percent per annum;

(2) for a loan with a principal amount greater
than two thousand five hundred dollars ($2,500) but not greater
than five thousand dollars ($5,000), no greater than sixty
percent per annum; and

(3) for a loan with a principal amount greater
than five thousand dollars ($5,000) but not greater than ten
thousand dollars ($10,000), no greater than thirty-six per cent
per annum.

B. A person required to be a licensee pursuant to
the New Mexico Small Loan Act of 1955, when making a loan with
a principal amount of ten thousand dollars ($10,000) or less,
may impose a one-time administrative fee of not more than
fifteen dollars ($15.00) per transaction but shall not charge a
borrower more than sixty dollars ($60.00) in administrative
fees in any consecutive twelve-month period.

C. A person required to be a licensee pursuant to
the New Mexico Small Loan Act of 1955, when making a loan with
a principal amount of ten thousand dollars ($10,000) or less
pursuant to the New Mexico Small Loan Act of 1955 shall not
charge any interest or fees not provided for in Subsections A
and B of this section or in Section 58-15-20 NMSA 1978.

D. A loan made pursuant to the New Mexico Small
Loan Act of 1955 shall be an installment loan payable in
substantially equal monthly payments and have the following
minimum loan periods:

(1) sixty days for a loan with a principal
amount of two thousand five hundred dollars ($2,500) or less;

(2) ninety days for a loan with a principal
amount greater than two thousand five hundred dollars ($2,500)
but not greater than five thousand dollars ($5,000); and

(3) one hundred twenty days for a loan with a
principal amount greater than five thousand dollars ($5,000)
but not greater than ten thousand dollars ($10,000).

"58-15-21. WHAT CONSTITUTES LOAN OF MONEY--WAGE
PURCHASES.--The payment of [two thousand five hundred dollars
($2,500)] ten thousand dollars ($10,000) or less in money,
credit, goods or things in action, as consideration for any
sale or assignment of or order for the payment of wages,
salary, commission or other compensation for services, whether
earned or to be earned, shall, for the purposes of regulation
under the New Mexico Small Loan Act of 1955, be deemed a loan
of money secured by [such] the sale, assignment or order. The
amount by which [such] compensation so sold, assigned or
ordered paid exceeds the amount of [such] consideration
actually paid shall for the purpose of regulation under the New
Mexico Small Loan Act of 1955 be deemed interest or charges
upon [such] the loan from the date of [such] payment to the
date [such] the compensation is payable. [Such] The
transaction shall be governed by and subject to the provisions
of the New Mexico Small Loan Act of 1955."

"58-15-24. LOANS MADE ELSEWHERE.--No loan made outside
this state to a resident of New Mexico in the amount or of the
value of [two thousand five hundred dollars ($2,500)] ten
thousand dollars ($10,000) or less for which a greater rate of
interest, consideration, charge or compensation to the lender
than is permitted by the [general] laws of New Mexico
[presently in force governing money, interest and usury] has
been charged, contracted for or received shall be enforced in
this state. Every person in any way participating in such a
loan in this state [shall be] is subject to the provisions of
the New Mexico Small Loan Act of 1955. Any loan made to a
nonresident of New Mexico in conformity with the law of the
state where made may be enforced in this state."

"58-15-36. [PAYDAY] LOANS--WAITING PERIOD.--A licensee
shall not make a [payday] loan to a consumer who has entered
into a payment plan pursuant to Section 58-15-35 NMSA 1978
until at least ten calendar days have passed since the consumer
completed all payment obligations pursuant to all of the
consumer's outstanding payday loan products, including that
payment plan."

A. A licensee making payday loans shall provide a
notice immediately above the consumer's signature on each
payday loan agreement in at least twelve-point bold type using
the following language:

"(1) A payday loan is not intended to meet
long-term financial needs.

(2) You should use a payday loan only to meet
short-term cash needs.

(3) A payday loan is a high-cost loan. You
should consider what other lower-cost loans are available to
you.

(4) If you cannot fully repay a payday loan
when due, you have a right to enter into a payment plan
requiring payment within a minimum of one hundred thirty days,
in relatively equal installments, based upon your scheduled pay
periods. If you enter into a payment plan, you will not have
to pay an additional administrative fee or interest on the
outstanding principal balance or any unpaid administrative
fees.

(5) If you have had payment obligations under
a payment plan pursuant to Section 58-15-35 NMSA 1978, you may
not enter into a new payday loan until at least ten calendar
days have passed since you have completed all payment
obligations pursuant to all of your outstanding payday loan
products, including that payment plan.".

B. Each licensee shall prominently display in each
licensed place of business, in a place where it will be readily
legible by consumers, a sign in at least sixty-point bold type
containing the following notice in both English and Spanish:
"If you cannot fully repay a payday loan when due, you have a
right to enter into a payment plan requiring payment within a
minimum of one hundred thirty days, in relatively equal
installments, based upon your scheduled pay periods. If you
enter into a payment plan, you will not have to pay an
additional administrative fee or interest on the outstanding
principal balance or any unpaid administrative fees."